Going into afternoon trading in the US, the dollar is holding onto its earlier gains. The move higher in the dollar was spurred by initial weakness in equities this morning. The move caused the EURUSD to hit session lows of 1.3550, although it has since recovered back to the 1.3580 level. Also, Forex traders which were had bid the GBPUSD earlier in the day to nearly 1.5450 on better than expected UK Trade Balance results have taken profits, as the pair has traded back to 1.5365. Additionally, the dollar move has cause profit taking in commodities, with Gold trading back below 1150.
Trade Balance Tuesday
Other than the morning headlines of Greece's debt auction (see previous news), the day's headlines have been dominated by Trade Balance reports from the UK, US, and Canada. As mentioned above the UK figures were better than expected, while the US's numbers showed a bigger than expected deficit taking place. Initially, the US news led to dollar weakness. However, after a deeper look into the numbers, Forex traders were enthused that US exports hit their highest levels since October 2008. Also, the US's trade deficit with China narrowed. As such, this news along with falling commodity prices have helped the dollar retain its afternoon gains.
Looking ahead, trading is expected to be volatile tomorrow as US Retail and CPI figures are released.